Grave and Graver Consequences
This week saw two very strange stories about overseas tech firms with San Francisco connections. Rod Serling couldn't have done any better.
[PROGRAM ADVISORY: I don’t see myself covering stories like these very often, but these two are just too weird to ignore - mte]
Pavel Durov nicked in Paris over Telegram moderation practices
The founder and CEO of Telegram Messenger, the cloud-based instant messaging service and social platform, was arrested at Le Bourget airport in Paris late in the evening on Aug. 24. Pavel Durov was apparently in transit from Baku, Azerbaijan, and is expected to appear in court soon. French authorities issued a warrant for his arrest as part of an investigation into “allegations of fraud, drug trafficking, organized crime, promotion of terrorism, and cyberbullying” on the platform.
Pavel Durov and brother Nikolai founded VKontakte, a Russian social platform similar in format to Facebook, in 2006; they founded Telegram in 2013 in response to a chain of events leading to their loss of VKontakte to business interests aligned with the Vladimir Putin government in 2014.
With an estimated 950 million active users, Telegram is promoted as a free speech platform, allowing users to send and receive direct messages, share media, and hold conferences and livestreams in channels of up to 200,000 users. It also claims to allow for end-to-end encryption in calls and chats. This has made the service attractive to activist groups ranging from pro-democracy groups in the former Soviet states to extremist groups elsewhere, including the United States. It has also been a venue for criminal activity, including the dissemination of child pornography.
French authorities have been moving incrementally to regulate social platforms, including requiring influencers to declare paid content and parental permission for children under 15 to use the services. They’ve also highlighted the role of the platforms in intensifying recent social unrest. President Emmanuel Macron described social media as the venue for “a cultural and civilizational battle” in a speech at the Sorbonne last April.
Telegram is based in Dubai, and Durov has citizenship in France and the United Arab Emirates. Users in the United States rely on servers owned by the platform and located in San Francisco; however, the company does not disclose their location.
Durov has spent considerable time in San Francisco while running Telegram but ruled out basing the platform in the city due to concerns over government scrutiny and an incident in 2014 where a group of men attacked him and tried to steal his phone outside of Twitter headquarters. Dubrov also tweeted about being involved in “a fight with guys who tried to grab my phone near Mission [and] 980” the following year.
Brit tech founder implicated in fraud over sale of company to HP dies in freak maritime incident
Mike Lynch, the Briton who founded enterprise search software company Autonomy and then became embroiled in accusations of fraud after the company's sale to Bay Area firm Hewlett-Packard in 2011 for over $11 billion, died when his yacht sank following being capsized by a sea spout while at anchor off a fishing village in Sicily Aug. 19. Six other souls also perished, including Lynch’s daughter, Hannah, and Johnathan Bloomer, the CEO of Morgan Stanley International. 15 of those aboard survived, including Lynch’s wife, Angela Bacares.
Autonomy made software that could monitor broadcast media for keywords, search for information in phone calls, and process it into suggested scripts for customer service operators. Before the sale to HP, the company was based in San Francisco and Cambridge, UK.
Lynch and a group of friends and family were reportedly celebrating his acquittal on 16 criminal counts of fraud and conspiracy in a San Francisco federal courtroom last June. The charges derived from claims by HP alleging "serious accounting improprieties, disclosure failures and outright misrepresentations" in the sale of Autonomy, which prompted an $8.8 billion writedown of its assets in 2012.
The United Kingdom’s Serious Fraud Office investigated the allegations but dropped its case against Lynch in 2015 due to lack of evidence. Sushovan Hussain, the company's CFO, was found guilty of fraud in 2018. A US federal grand jury indicted Lynch and Autonomy's VP of Finance, Stephen Chamberlain, in 2020. Lynch was extradited in 2023.
The case generated significant controversy over the US-UK extradition treaty, with some British leaders claiming it was unequal. Lynch and Chamberlain were both tried in March and found not guilty on June 6.
Lynch’s 184-foot flybridge sailing sloop, Bayesian, was struck by a water spout, a kind of tornado, and sank quickly in 160 feet of water. Notably, it has the tallest mast of any vessel in its class, which may have contributed to it being capsized. Italian authorities are also investigating for negligence.
Shortly after the incident, Sir David Davis, Conservative MP for Goole and Pocklington, told reporters that he had planned to meet Lynch to further discuss his plans for creating a UK version of the Innocence Project, a non-profit law firm dedicated to appealing cases of those wrongly convicted, starting with the case of Lucy Letby, a National Health Service neonatal nurse currently serving a whole life order, the equivalent of a life sentence with no parole, for the murder of seven infants and the attempted murder of eight more under her care between 2015 and 2016 at a hospital in Chester, UK.
Also notably: Chamberlain was also killed last weekend in what has been described by police as a road accident. He was hit by a car while jogging in Cambridgeshire, UK, Aug 17.